Fallout from building boom in Australia's tourist mecca

ByRon Scherer, Business and financial correspondent of The Christian Science MonitorJuly 23, 1981

Surfers Paradise, Australia
— Construction cranes are now nearly as common as surfboards on Austrlia's "Gold Coast." This small strip of Queensland beach, an hour south of Brisbane, has become the hottest piece of real estate in Australia. Condominiums exchanged hands several times before the cement is cured, as a Las Vegas-type of fervor has gripped the beachfront.

Recently a motel, with only 80 rooms -- or "perches," as they are called locally -- sold for more than $6 million, or $75,000 per perch. And two-bedroom units looking out on the concrete and neon have gone from $153,000 to $500,000 in just 18 months. Many of the local residents have heard stories of speculators who have put only 10 percent down on a property and resold it before settlement day.

So far this year, Surfers Paradise has been a real estate developer's idea of heaven. Approval has been given for construction of 150 buildings, down only slightly from the 170 built on the Gold Coast last year. Even though the city council recently changed the zoning rules to limit a building's size to 25 percent of its land area, new blueprints are arriving in contractor's offices practically every day.

While all this activity may warm the hearts and line the pockets of the developers, it has also raised some eyebrows elsewhere. The director of the Australian Institute of Marine Science, Dr. John Bunt, who points out that he is not a "conservationist," says what bothers him about Surfers Paradise is that "people tend to compare it to Miami Beach, and when you ask them about the problems that Miami Beach has, you get no answer."

Among Miami's problems, for example, are a declining water supply, air pollution problems, and urban ills. Dr. Bunt points out that so far there is no evidence that he has seen of ecological problems associated with the development here, but he adds, "Australians tend to think in terms of a limitless amount of natural resources; so it's hard to get people to understand the problems."

Attempts to limit the development, or at least pay for extra sewage facilities, water, and electricity, have met little success. The city council considered a proposal to put a tax on tourists through the hotels, but ran into considerable resistance from the resort owners. "We would be the only area with a tax on tourists," Says Fran King, president of the Accommodation Owners' Association. The resort owners need only identify the fact that nearly 50 percent of employment on the Gold Coast touches on tourism in some fashion to make their point with the politicians.

The area has also attracted a large transient population. "A lot of young people come up here to work during the winter," says Mrs. King, "and then have the summer off." The Australians refer to these young people as "drifters," moving from resort location to resort location, earning living expenses as waiters or chambermaids.

Even when the real estate bubble bursts, Surfers Paradise will probably continue to attract people. The climate is semitropical, equivalent to that of Florida, and lures many retirees. The permanent population has grown to 120,000 , compared with 69,000 10 years ago.

The beaches have row after row of perfect waves. They have been drawing international surfers for years. According to Mrs. King, tourists from Japan and Germany have started to visit the Gold Coast. Since rainfall is minimal, the area has always lured winter vacationers from rainy New Zealand and cloudy Melbourne. A large amusement area, called Sea World, brings tourists down from Brisbane.

Tourism could grow even more if Australia liberalized its airline policy. Some Queenslanders would like to see more competition among the airlines serving the area. The international gateways of Sydney and Melbourne get the bulk of the international tourist dollar and, since domestic air fares are so high, tourists have been reluctant to wander north.